Woori Bank, South Korea’s third-largest commercial lender, officially adopted a financial holding company structure on Monday, pledging to actively pursue strategic mergers and acquisitions to expand its nonbanking business under its new status.

“Woori has held a strong banking business, but its nonbanking segment has remained weak until now,” said Sohn Tae-seung, chairman of Woori Financial Holdings and Woori Bank, during a press conference at Woori Bank’s headquarters in Seoul on Monday.

“Under the new holding company structure, we hope to thereby build up a stronger portfolio in the nonbanking business areas,” he said.

The banking group will start off its expansion moves this year by directly acquiring small-sized companies in the areas of asset management, real estate investment trusts and savings banks, Sohn said.

It will take some time before Woori Financial Group can pursue bigger M&As, since it is obliged to maintain a set capital adequacy ratio and thus has limits on capital usage.

For larger-scale acquisitions -- of securities and life insurance companies -- Woori will join hands with other buyers for smaller stakes. After procuring more capital, Woori could then move to raise its stake ownership to more than 50 percent in those firms, he noted.

The Woori chief did not mention the names of any specific potential acquisition candidates, saying that “multiple acquisition candidates are currently under consideration.”

As of end-2018, Woori’s net assets are estimated at 390 trillion won ($347.3 billion), below that of rival finance holding companies with stronger nonbanking businesses, according to Sohn. However, its asset status will improve by 2020 and 2021, when profits from new acquisitions start to kick in, he said.

In the long run, Woori Financial Group's goal is to bring its banking to nonbanking business ratio to 7:3 and eventually to 6:4, according to the chairman.

In addition to pursuing M&As to expand its nonbanking business, another priority of Woori is going global. This will include bringing its main banking business to more global markets, while pioneering new opportunities abroad in the nonbanking sector.

“Looking ahead, we want to move beyond the old model of competing for a limited pie in the domestic market and pioneer new markets overseas. Our strategy is to significantly raise our competitiveness in four core areas of globalization, digitalization, corporate and investment banking and asset management,” Sohn said.

The chairman’s remarks came as Woori Bank officially reinstated itself as a financial holding company, marking the major structural shift in a celebratory event in Seoul on Monday.

With the change, Woori Financial Holdings now owns six subsidiaries: Woori Bank, Woori FIS, Woori Finance Research Institute, Woori Credit Information, Woori Fund Services and Woori Private Equity Asset Management. It also has 17 other units including Woori Card and Woori Investment Bank under its arm.

Moreover, Korea’s finance and banking sector will now see five major financial holding companies -- KB, Shinhan, Woori, Hana and Nonghyup -- competing for profits and customers.

Until now, Woori Bank had been Korea’s only commercial bank without a holding company structure -- a status that had posed limits to its investment activities and business potential compared to rivals.

Woori had initially started off as Korea’s first-ever banking group in 2001, comprising of multiple banks that went under in the aftermath of the 1997 Asian financial crisis. It had been wholly owned by state-owned Korea Deposit Insurance Corp.

In the following years, the government set out to privatize Woori Financial Group through sell-offs of its non-banking business units, including provincial banks and securities companies in 2013. In the process of privatization, Woori Financial Holdings was absorbed by Woori Bank in 2014, removing the holding company structure.

Under a bank status, however, Woori was subject to limitations on its volume of private investments, limiting its ability to branch out into nonbanking businesses and make strategic acquisitions in comparison to rival banking groups.

After repeated attempts to transition back to a holding company structure, Woori Bank obtained regulatory approval from the Financial Services Commission in November 2018 to pursue the structural change. Official registration procedures were completed on Friday.

As of now, Korea Deposit Insurance Corp. still owns an 18.4 percent stake in Woori Bank. But this stake will be sold off as soon as possible, to ensure the full privatization of the banking group, Financial Services Commission Chairman Choi Jong-ku said Monday.